Tuesday, June 02, 2009

General Motors, a Bridge too Far

Our government says they own 60% of General Motors. 60% of nothing is still nothing. The company is going to keep Cadillac and get rid of Pontiac. I hate to say it, but Cadillac is an “Old Farts,” car. 50 years ago you were somebody if you had a Cadillac. Today, a Lexus, Beamer or a Mercedes will project an aura of status. You know damn well grandpa didn’t drive one of those! In the present economy, shouldn't the focus of production be more on utilitarian rather than luxury type cars?

Now the government wants GM to produce electric cars and “increase car mileage.” Electric cars sound great, but maybe in another 50 years they might be economically feasible. Now, they deliver too little and are not as cost effective as a regular gas guzzler. On paper, it's a no brainer, in the real world, they just aren't practical. Plus, Congress’s requirement for better gas mileage has more to do with car production than more efficient engines. The car manufacture mileage ratings are a reflection of the average miles per gallon for all cars produced by the company. So to increase gas mileage, you produce more smaller cars than larger ones.

When we examine what is happening to GM, it is very apparent that they have made extremely poor business decisions since the early 1960’s. The American car companies have always had an attitude problem. It’s kind of like Henry Ford’s comment, “Tell the consumer, he can have any color car he wants, as long as it’s black.” The leaders in innovation have come from the foreign car manufacturers, and they have earned their way into our country by being better.

In Southern California, massive traffic jams on are not an indication that we need more freeways. If we have to live with traffic jams like this, why can’t we have public restrooms every 10 miles on the freeway? (There are NONE in all of LA) The idea that better mass transit would lead to less cars on the highway never seems to be an obvious solution.

Here is an experience of mine that relates to mass transportation. Last year I was flying from San Diego to Washington DC. I got to Chicago and the connecting flight was canceled (talk about being irritated). I was able to book a flight into Baltimore MD. I was told by the ticket agent that it was a cinch to get to O’Hara in DC to recover my luggage (he stretched the truth a bit). From the Baltimore airport (the people there were extremely helpful), I took a 17 mile bus ride to the beginning of the Washington DC subway. The whole way on the bus, I’m thinking “Riding a subway late at night in Washington DC, I have to be nuts!” When I stepped into that subway station, I felt like a hick from the boonies. The size and grandeur of what they have built is mind boggling. This transit system got me to O’Hara in less than an hour; I picked up my baggage and my rental car and was on my way. As for sights to see in DC, I recommend the subway. The rest of the country needs a mass transit system on this level.

So with all of these car companies going broke, who in Congress is going to stand up and push for mass transit? --No one. GM has got to sell some vehicles, lots of them.

If we need to spend a lot of money to stimulate the economy, wouldn’t mass transportation be the spot to place it? Let GM die. They never had our best interests as a nation at heart. They wanted you buy a new vehicle every two years and keep them in business. The car companies from the 1930’s on, were responsible for the destruction of mass transit in the United States, “Everyone should own their own private vehicle.”

The only trouble with the government bailout plan for GM, is that how do you finance a car without a job? And if you do have a job, do you really need a new car? And of course it follows, if you don’t need a new car, then you don’t really need mass transit either. It’s amazing how things just seem to work out just right--go figure!


Tyrone said...

Glad to see you posting, Jim.

Jim in San Marcos said...

Hi Tyrone

I was studying for my Networks + exam (which I passed). It didn't leave me much spare time. I'm back.

Anonymous said...

Today, a Lexus, Beamer or a Mercedes will project an aura of status.

No, they project an aura of living beyond one's means. The only image that matters is if the line is profitable or not.

Anonymous said...

The rest of the country needs a mass transit system on this level.

Are you crazy? The thing operates at a loss!

Jim in San Marcos said...

Hi Anon 11:11

I don't think that I'm certifiably crazy, but what part of government runs at a profit?

Anonymous said...

I read somewhere, darned if I can find it again, that the Federal Government budget is WAAAYYY worse then Californias. So I guess they do not operate at a profit.
I am sure they will do a bang-up job running Government Motors.
As one who used to live in California, now Oklahoma, I can relate to CAs traffic problems.

Jim in San Marcos said...

Hi Anon 11:06

I agree and to take it one step further, "living beyond our means," is a little like the way this stimulus package, we hear so much about, works.

Jim in San Marcos said...

Hi Anon 5:03

The words "quality control" and "customer satisfaction" come to mind as items that will be missing from future GM products. You certainly don't want to kick the tires if the government made it.

You kind of wonder what they will name this new car. "Edsel" has already been used once.

Anonymous said...


The last 100 years of the US was built around the idea of a suburbian sprawl where chasing cheaper houses with a lawn is the American dream. It will take a "massive" shift in mentality of the average motoring citizen to drop the convenience of the gas powered motored vehicle for a sardine transit system.

Perhaps instead of mass transit, lets spend trillions developing and building Human Teleportation Devices in every home and business in the country. As a taxpayer, I could get behind throwing down the drain trillions of borrowed $$$ on an HTD that is physically impossible than blowing the cash on a failed government-run auto industry.


Boom2Bust.com said...

Why "stimulate" when you can tax the public directly? It sounds like there's a consensus among transportation experts and lawmakers that some form of a tax increase will be required shortly to make up for lower gas tax revenues and to maintain and build-up our crumbling transportation infrastructure...

"Federal Highway Fund To Go Broke By August"

Anonymous said...

Agree that the D.C. transit system is the best in the U.S. We visited D.C. for a week,stayed in Virginia, never rented a car, and did not miss it. $5. a day to go anywhere!
Second best is San Francisco BART.
Third best is buses on Oahu. All new, all airconditioned,friendly drivers.
$20. for 4 days to go anywhere.

In Oakland, CA GM bought the rail system, then dismantled it in the 40's and 50's.

Jim in San Marcos said...

Hi Boom 2 Bust

Thank you for the link, I liked the guy fishing in a pot hole. I remember years back in New York where you honked your horn before you went in one, they were big.

7 billion doesn't seem like much for the Federal government to come up with, considering the bank bailouts and GM.

There is an issue here that is hidden. The states have to come up with matching funds for these highway projects, to get the dollars from the Fed (as little as 20% on other projects). It doesn't look like California will be able to qualify for matching funds--they're broke. So the Fed might not even have to come up with the money.

This could really irritate taxpayers.

Jim in San Marcos said...

Hi Anon 4:39

Looks like you have been doing some traveling. You can't get me into Bart in San Francisco. I guess its the fear of being underwater during an earthquake--call me chicken! The Trolley Cars are now $5 each way (which proves you don't need a gun to rob a tourist).

I only need a car one hour a day; to go to and from work, and then it sits in the garage on the weekend. It tends to be a real waste of resources.

At some point in our future, there will be an obvious savings from mass transportation. That will come when you sit for 5 hours in traffic to go 20 miles.

The prices you quoted have to beat the cost of parking.

Thank you for your post.

AIM said...

Both Wall St. and suburban sprawl killed Main St. Guess what?

Main St. will come back now. Goodbye to big corporate franchises as more and more Mom & Pops open up. People will live in towns where they can walk to work and get everything they need. Many will go without cars. Local surrounding farms will supply the towns with food.

It's over America. The dismantling will begin soon and a new lifestyle will begin. Back to roots. A lifestyle I actually prefer.


Jim in San Marcos said...

Hi Aim

I tend to disagree somewhat. I think that working for easy money is gone for a very long time. Many of the big money jobs are toast. For most people the ability to walk to work means that they might not have picked the best paying job they were offered. I can walk to 5 fast food restaurants from my home. I wouldn't consider any of them job opportunities.

To be fair, walking to work could work for either me or my wife but not both, one of us would have a long drive.

I do see a dismantling of the inner city ghettos. Without a welfare system in place, the this part of society cannot survive. I see these people moving away from the inner city just to find a job.

Another thing that could be hit hard in a depression is the illicit drug trade. The rampant cocaine addiction of the late 1920's dried up when poverty became a way of life.

I do agree that things are going to change drastically. I'm not quite sure how. People are going to think twice about every dollar before they spend it.

We could both be right; there is no script to follow.

Take care.

Anonymous said...

Mass transit will not happen in LA. Our city is too spread out and badly designed due to zoning that forces us to build the business areas far from the residential areas. There is no city center. The buses we have are purely for the illegal alien nannies to get to work on the westside.

cece said...

AMEN to that Jim.
Thanks for posting. I do check everyday for your insightful posts. Keep it up.

Jim in San Marcos said...

Hi Anon 10:01

I don't see where they can build more roads in LA to handle the traffic. More cars will make the situation even worse.

I could see a fast transit system shaped like a tic tac toe board for LA. Something like that would make bus service from the grid a 20 minute hop. That could cut down the daily commute to 40 minutes from an hour and a half.

You could be right that it will never happen. California is broke.

Anonymous said...

I love mass transit. No one has mentioned Boston's subways yet, last time I was there, the trains were excellent.

The problem with most mass transit is government. The government subsidizes the worthless transit agencies to a point that the transit agency doesn't HAVE to satisfy the customer; welfare offices hand out free bus passes to the poor, and soon you have buses that only run from welfare office to payday advance to mall to projects.

My commute options are A) drive, B) bicycle, or C) spend 1 1/2 hours, change buses 3 times in blazing heat or freezing rain, hoping the derelict beside me doesn't vomit on my nice interview suit. Passenger fares are less than half the local transit agency's budget, so what do they care if they lose a customer by not offering decent routes?

ray said...

GM bribed people to get rid of our streetcar system in St. Louis over fifty years ago so that they could sell diesel buses. The bus has never proved as popular, but other events have changed America drastically since the late forties. Desegregation, white flight and sprawl have made mass transit difficult to implement. SWPL said white people like mass transit that is not a bus. They think of a bus as a large van that stops all the time to pick up smelly people. I'd love to see mass transit return, but I can't imagine the cost in an area like Dallas/Ft. Worth. Our Metro system in St. Louis has low ridership and can be dangerous to ride at times.